Injured Driver Gets Benefit of 2009 Anti-Stacking Law, Current Drivers Do Not

Jan. 17, 2013 – A motorist who was injured by an uninsured drunk driver in 2010 will get the benefit of an anti-stacking prohibition that was repealed in 2011, a state appeals court has ruled, meaning the injured motorist can use more than one policy to cover damages.

Stacking allows insureds with multiple cars to “stack, or “add together” uninsured or underinsured motorist (UM) policies. UM policies protect against drivers with limited or no insurance. In 2009, Ronald and Antoinette Belding had two UM policies covering two cars.

Each UM policy covered $100,000 per person. But Ronald suffered more than $100,000 in losses when an uninsured drunk driver struck the vehicle he was driving in 2010. Thus, Ronald sought to stack the family’s second UM policy to provide added coverage.

At the time, stacking was allowed by law, and any provision that attempted to disallow it was illegal. Specifically, 2009 Wisconsin Act 28 prohibited insurers from including anti-stacking clauses within UM policies. This prohibition was repealed under 2011 Wisconsin Act 14.

State Farm Mutual Auto Insurance Company argued that a “drive other car” exclusion applied to bar use of additional coverage amounts. That is, the exclusion barred Ronald from adding UM coverage amounts from a policy that did not list the vehicle involved in the accident.

But the District II Wisconsin Court of Appeals in Belding v. Demoulin, 2012AP829 (Jan. 16, 2012) ruled that Act 28 prohibited this type of anti-stacking provision.

A three-judge panel noted that Act 28 specifically allowed insureds to stack coverage on up to three policies for one accident, but a “drive other car” exclusion would still prevent an insured who owns multiple vehicles from stacking coverage based on vehicles that were not insured.

“[The law] still permits clauses that prevent an insured from invoking UM free rider coverage for accidents resulting from the insured’s use of a vehicle that the insured or a related member of the household owned, but chose not to insure at all,” wrote Judge Lisa Neubauer.

The panel noted that any accident occurring between Nov. 1, 2009 and Oct. 29, 2011 – the two-year period before Act 28 was repealed – would be subject to the anti-stacking prohibition. But Act 14, effective Nov. 1, 2011, allows insurers to include anti-stacking provisions in policies.

Seesaw on Stacking

Wisconsin has wrestled with UM stacking since the 1960s, the panel noted, when insurers began including anti-stacking provisions in UM policies to prevent insured persons from cumulating coverage limits. Courts ruled those provisions did not violate public policy.

Under legislation effective in the 1980s, anti-stacking provisions were prohibited, and courts upheld the anti-stacking legislation. The winds changed again in 1995, when the legislature repealed the law to allow “drive other car” exclusions like the one at issue in Belding.

Act 28 took effect in 2009, prohibiting these anti-stacking provisions once again. But most recently, Act 14 lifted the prohibition on anti-stacking provisions and currently controls.